Governor of the Bank of England Andrew Bailey has told of strong demand to invest in climate change technology, with one of his key priorities making sure the mechanisms are right to do so.
An influential figure in framing national economic policy, he took the role in March, succeeding Mark Carney who he described as “the world leader in climate finance”.
Addressing The Waterline conference virtually, he underlined how “we at Bank of England are fully committed to continuing this work”.
The Humber aims to lead the world on net zero technology, transitioning the most carbon intensive cluster into a 2050 champion - with key pillars being offshore wind, hydrogen and carbon capture.
Mr Bailey said: “It is really great to see the determination and the innovation to keep the momentum of the campaign I know you have got on climate change, applying that change and really catalysing change in the Humber towards a net zero economy. Congratulations on the record of change already.”
Explaining how Covid-19 has dominated the year, and how he didn’t think it right to factor in green credentials in business bailouts as the pandemic hit as “it was people’s jobs and livelihoods, and we didn’t feel it appropriate to choose between businesses on that basis,” Mr Bailey said the green recovery was that opportunity.
“We had to make a very hard choice in the spring when it was essential the Bank of England stepped up quickly in supporting and providing finance to business alongside the government,” he said.
“That was then, it was important at that time, and now we must look forward - not easy in the current environment - but it is excellent events like this that are doing just that.
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“We need to emphasise everything we can do to tackle the big risks we face, and act early on them, and of course climate risk is very much one to focus on.
“It is going to be with us after Covid, still there to be tackled. In thinking about recovery from what is the deepest recession for a very long time, I think it is very important that we take that opportunity to address climate change at the same time.
“There are huge commercial opportunities attached to climate change and you are already demonstrating that in your work around the Humber.”
Mr Bailey, who came to the rescue of the Humber seafood industry in the last recession, said there was a key role for private finance, and the appetite and necessity presented an opportunity to reverse two trends.
“We have had, unfortunately, pretty weak business investment in recent years and likewise very weak productivity growth in the economy. We need to change both of these things in recovery, and investment to tackle climate change is an important part of that.
“There is a great demand to invest in supporting climate change. That investment needs to be supported by infrastructure, and a big part of that infrastructure is clear and consistent disclosure of risks - so people can understand what they are investing in, and what the climate properties of what their investment is.”
Offshore wind - the renewables sector that has reached critical mass and is maturing nicely on the Humber - now brings in investment prior to construction, with the case proven and “de-risked”.
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“When we recover from Covid and tackle climate change, and also tackle our new trading relationships in a post-Brexit arena, we need to turn that business investment story round and at the Bank of England we are committed to doing all we can to support and enable that by encouraging and enabling appropriate saving and investment structures.
“We need to see innovation in the way in which investment takes place. There is no question demand for ‘climate change consistent’ investment is rising and we have got to enable that to happen, and that for me is a very important priority, it is one of my most important priorities.
"There is a lot to do on this front, we have had our sleeves rolled up all year dealing with Covid, and that has got to go on and we will go on, we will tackle these important issues. I congratulate everyone who is making so much of this happen around the Humber.”